Dnex expects wafer delivery volumes to normalise

PETALING JAYA: Dagang Nexchange Bhd (Dnex) expects the volume of wafer shipments to normalise over the near term, primarily due to the commitment of delivery volumes from its three long-term agreement customers.

In a filing with Bursa Malaysia, the technology group said concerns over a global economic downturn had led to inventory adjustments and short-term fluctuations in demand for semiconductors.

“Continuous improvement in manufacturing productivity and efficiency together with cost control focus continue to be implemented throughout this challenging time in the industry.

“Wafer shipment volume has been impacted as customers have reduced their orders in response to projected demand,” it said.

The drop in wafer shipments impacted the group’s revenue for the quarter ended Dec 31, 2022, which fell 6.4% year-on-year (y-o-y) to RM330.53mil.

In the technology segment alone, revenue contribution declined 25.8% y-o-y, although the impact of the decline was mitigated by revenue increases in the energy and IT segments of 36.3% and 9.3%, respectively.

Dnex’s net profit for the quarter under review was down 27.26% y-o-y to RM31.88mil, representing an earnings per share of 1.01 sen.

For the six-month period to Dec 31, 2022, the group’s net profit was down 78.18% to RM73.61mil while revenue was up 20.2% to RM750.11mil.

Short-term demand volatility notwithstanding, Dnex projects a strong future outlook for semiconductor chips with the persistent adoption of electric vehicles, Internet of Things devices and 5G technology.

“The demand for semiconductor chips is projected to stay strong, driven by the growing needs of the automotive, data storage, and wireless connectivity industries,” it said.

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